CMS Sets 2026 Medicare Premiums and Deductibles as Costs Rise and Policy Changes Take Effect

CMS Sets 2026 Medicare Premiums and Deductibles as Cost Pressures Mount and Regulatory Fixes Temper Increases

The Centers for Medicare & Medicaid Services (CMS) has released the 2026 Medicare Parts A and B premiums, deductibles, and income-related adjustment amounts, outlining another year of steady cost increases across the program. While the updates reflect predictable inflationary and utilization patterns, the 2026 notice carries added significance, it reveals the push-and-pull between rising care costs and targeted regulatory interventions that helped prevent even steeper premium spikes.

Announced November 14, 2025, the updated premiums and deductibles will affect tens of millions of Medicare beneficiaries starting January 1, 2026 a population increasingly sensitive to annual cost growth as seniors face financial pressures from inflation, prescription drug prices, and higher out-of-pocket spending.

Part A: Steady Upward Pressure on Hospital and Post-Acute Costs

Medicare Part A, which covers inpatient hospital care, skilled nursing facilities (SNFs), hospice, and some home health services, shows a pattern familiar to health-policy watchers. Costs continue rising as the system absorbs a sicker, older population with more complex care needs.

The Part A inpatient hospital deductible will increase by $60, reaching $1,736 in 2026. This deductible applies to the first 60 days of inpatient care a threshold millions of beneficiaries meet or exceed yearly.

For beneficiaries requiring extended hospital stays, cost-sharing climbs even higher:

• $434 per day for hospital days 61–90 (up from $419),
• $868 per day for lifetime reserve days (up from $838).
  SNFs see similar increases, with the daily coinsurance for days 21–100 rising to $217.

Nearly all beneficiaries about 99% will continue to pay no Part A premium, having met the required work history under Social Security. But those who buy into Part A will see premiums rise to $311 (reduced rate) or $565 (full premium), reflecting the rising cost of inpatient and post-acute care delivery.

These increases come as inpatient hospitals face sustained cost pressures, workforce expenses, higher patient acuity, shifts in surgical volumes, and increasing reliance on hospital-based post-acute transitions.

Part B: Premium Rises to $202.90, But Could Have Been Higher

The 2026 Medicare Part B monthly premium covering physician services, hospital outpatient care, imaging, equipment, and preventive services will rise to $202.90, a $17.90 increase over 2025’s $185 standard rate. The Part B deductible increases to $283, up from $257.

CMS attributes these increases to “projected price changes and assumed utilization increases,” consistent with historical patterns. But this year’s update includes a notable storyline, without a key regulatory reform finalized in the 2026 Physician Fee Schedule, premiums would have increased even more.

CMS implemented sweeping changes to skin substitute reimbursement, a category that had seen what the agency described as “unprecedented spending.” By shifting payment amounts and tightening program rules, CMS expects spending in this area to fall by 90%, and notes that the 2026 Part B premium would have been roughly $11 higher per month without this action.

In other words, an already significant increase would have been steeper had CMS not intervened a reminder of how targeted rulemaking can meaningfully impact beneficiary costs.

Part B immunosuppressive drug coverage available to individuals whose full Medicare benefits end after a kidney transplant will carry a $121.60 monthly premium in 2026.

High-Income Beneficiaries Face Updated IRMAA Surcharges

Income-Related Monthly Adjustment Amounts (IRMAA) continue to affect roughly 8% of Medicare beneficiaries enrolled in Part B and Part D. High-income seniors will face higher monthly costs in 2026 across all categories.

Examples for full Part B coverage include:

• $202.90 monthly for individuals earning Less than or equal to $109,000
• $284.10 monthly for individuals earning $109,000–$137,000
• $405.80 monthly for income levels of $137,000–$171,000
• $527.50 monthly for income levels of $171,000–$205,000
• $649.20 monthly for income levels of $205,000–$500,000
• $689.90 per month for individuals earning $500,000+.

Similar tiered surcharges apply to Part D coverage, where IRMAA totals range from $14.50 to $91.00 per month depending on income. These amounts are deducted directly from Social Security benefits or billed by Medicare, depending on how beneficiaries pay for their drug plans.

As the number of high-income retirees grows, IRMAA brackets continue to play a larger role in Medicare financing strategy.

Medicare’s 2026 cost updates reflect a system navigating long-term financial pressures, more beneficiaries entering the program, higher service use, costly chronic disease management, and evolving technology and drug costs. Premium increases even moderate ones carry political and economic weight.

Yet the updates also highlight how regulatory policy can materially shape annual beneficiary costs, as demonstrated by CMS’ intervention in skin substitute spending. As the Medicare trust fund faces insolvency later this decade, CMS and lawmakers will continue to scrutinize where targeted reforms can temper growth without compromising care quality.

The ultimate challenge remains unchanged, balancing system sustainability with affordability for patients who depend on Medicare the most.